TODAY’S HEADLINES / February 27, 2007 / Baton Rouge Business Report Daily Report Real Estate Weekly - http://www.daily-report.com/  Developer donates land for two new Livingston schools A New Mexico-based developer will donate 41 acres of land next to a subdivision it's developing so the Livingston Parish School system can build two new schools just south of Denham Springs. Renaissance Development Group is donating the land in and next to its Juban Parc subdivision, and Tony Bull, chief financial officer, says the company is looking to do similar things in subdivisions it has planned for Watson and in Ascension Parish. "No question it helps a development to have a school near it," Bull says. "But this also fits in with our plans to give back to the community." Juban Parc is currently under development off Brown Road. The first 82 lots in the development, which will eventually have more than 500 single-family homes and townhouses, will go on sale in the next two weeks. Homes in Juban Parc will sell in the $220,000 to $250,000 range. Randy Pope, Livingston Parish school superintendent, says he's never had a developer donate land for a school. "These thousands of new houses are impacting our school system everyday because they have thousands of children in them," Pope says. If voters pass a bond issue to pay for the schools in May, Pope says construction should begin in early 2008. The schools would be open in time for the 2009-10 school year. (Timothy Boone) Realtor Expo & Education Day set The Louisiana Realtors will hold Realtor Expo & Education Day March 14 at the Lafayette Hilton & Towers. The event will feature educational programs from national instructors, as well as a trade show. Registration is $75. For more details call the state Realtors at (800) 266-8538 or go to larealtors.org/expo. Fidelity report: Don't count on home equity for retirement A report by Fidelity Investments urges homeowners not to count on home equity to come through with a major portion of retirement funding. Home values have underperformed stocks and bonds from 1963 to 2005, says the report. A dollar invested in stocks in 1963 would have compounded to $12.36 by 2006, while the same dollar would have grown to $1.79 in real estate. Even though median home prices have been rising for more than 30 years, the report notes there have been several sharp corrections. Tom Cook: North Boulevard office building sells The office building located at 400 North Blvd. has changed hands. The previous owner, SAP II, represented by Pat Powers, sold the property to a corporation known as 400 North Boulevard, which is owned by Dean Properties. The office building is situated on the corner of North Boulevard and Fourth Street, and long-time Baton Rouge residents will remember it as the old Baton Rouge Savings and Loan building. The property was most recently occupied by the East Baton Rouge Arts and Technical School. The sale took place Feb. 16 for $1.5 million, and included the assumption of an existing ground lease. The building contains approximately 45,200 square feet, so the sale price calculates to approximately $33 per square foot. This appears to be an excellent buy for the new owner. Dean Properties has been successful in purchasing older buildings in the downtown area, refurbishing them, and selling them at relatively high returns on the investment. Yesterday, Daily Report had information about the construction of a new Capital One branch bank near the corner of Bluebonnet Boulevard and Burbank Drive. The site was purchased for about $930,000, and contained about 58,000 square feet. The sale price of the new Capital One location was more than $16 per square foot. This is one of the higher prices paid for a site in this corridor. The Capital One purchase was most likely influenced by the proposed construction of a Super Wal-Mart on the southeast corner of Bluebonnet Boulevard and Burbank Drive. (Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.) Brian Andrews: Is that an iceberg ahead? One of the panel discussions presented at the recent mortgage bankers conference was entitled "USS Credit Quality: Love Boat or Titanic?" While acknowledging great lending volumes and low delinquency rates, at least in the commercial arena, the panelists noted potentially dangerous underwriting practices and questioned if the love fest would continue or if we are on a dangerous path with an icy ending. The questionable practices included: -- underwriting to potential but unproven future cash flows -- using artificially low cap rates to support property values -- ignoring "stress tests" on interest rates and vacancy levels The panelists generally agreed that lenders are stretching more than ever to win business and that a strong market would continue the party. There was also a general feeling of uneasiness that a sudden turn in the economy could be devastating to the industry. No one knows when that turn will happen but no one wants to be out of position when it does. I maintain that competition among lenders is usually a good thing that benefits the borrower. I also maintain not every loan request should be granted, at least not at the highest possible leverage levels or lowest coverage ratios, because it is the borrower who suffers first when things go bad. If secondary and tertiary sources of repayment fail, the lender eventually suffers as well. But I also make my living arranging financing, so I like when loans get approved. So where is the balance? My distinction and the distinction made by the panelists is that HEALTHY competition among lenders is good for the market. And to me healthy competition is the lender stretching when and where it is appropriate to do so, but not so much that everyone is put at an inordinate amount of risk. I was a banker in Texas during the 1980s and was firsthand witness to the gunslinger mentality that brought that market to ruin. There was never a downside; the other guys were idiots, appreciation would solve all problems and we were bulletproof. Or so we thought. History proved otherwise. So, armed with the lessons learned from the 1980s, are we better prepared now and in a better position to stretch the underwriting boundaries to continue record lending and profit levels? In Texas we could not see the icebergs in the distance (even if they were out there, we were unsinkable, right?) and whirled through the market as if the ride would never stop. Hopefully here in Baton Rouge 20 years later, we know better. I am going to make sure I know where the lifeboats are, just in case. (Brian Andrews is a certified mortgage banker specializing in the financing of commercial real estate. His business is Andrews Commercial Mortgage and he can be reached at brian.andrews@acmla.com.) Real estate recap: Capital One buys land for Bluebonnet-Burbank branch New south Baton Rouge branch planned: Capital One has purchased land on Bluebonnet Boulevard near the Burbank Drive intersection and plans to build a full-service branch there. The bank paid $930,016 for the land. Construction on the 5,300-square-foot branch should start in the next month or so, and the location should open later this year, says Steven Thorpe, a Capital One spokesman.

TODAY’S HEADLINES / February 16, 2007 / Baton Rouge Business Report Daily Report - http://www.daily-report.com/ 

Baton Rouge home prices see big jump
Home prices in Baton Rouge increased by 12.7% in the fourth quarter of 2006 over the year before, according to the National Association of Realtors, putting the area among the top 10 biggest gainers. The median home price in the Capital Region was $173,400 during the last three months of 2006. Baton Rouge was one of the few winners during the quarter, according to figures in The Wall Street Journal. NAR says home prices dropped in about half of all markets, compared with the year before. New Orleans home prices fell by 9.3% in the fourth quarter, with the median home price of $162,100. David Lereah, NAR's chief economist, says the numbers probably reflect the bottom of the current housing slide. Employment remains strong, mortgage rates are low, and Lereah says figures show home prices starting to stabilize during the end of the quarter. The total number of home and condo sales was down 10.1%, to 6.24 million units.

TODAY’S HEADLINES / February 13, 2007 - http://www.businessreport.com/dailyreport.cfm?cid=53

Trends conference April 19
The annual Trends program will be April 19 at BREC's Independence Park Theater. The event, which since 1988 has been a joint operation between the Greater Baton Rouge Association of Realtors and the LSU Real Estate Research Institute, gives local Realtors a chance to find out what's going on in the local economy, as well as giving them a forecast for the upcoming year.



Number of Realtors dropping
The national housing slump is causing many Realtors to hang up their blazers, reports The Wall Street Journal. While the number of licensed Realtors hit a record of nearly 1.4 million last year, the chief economist for the National Association of Realtors says he expects to see the number drop 6% to 8%, as agents go into other lines of work. The head of one Minneapolis real estate company told the newspaper he thinks the industry has as many as 25% more Realtors than it needs. Read the article here.

Poll: Most expect interest rates to rise
Real Estate Weekly readers predict interest rates will rise this year. Thirty-six percent think rates will increase by less than 1% point; 23% think they'll rise by more than 1% point. Twenty percent think rates won't change at all during 2007, while 21% think the Fed will drop rates. More than 400 people participated in the survey.

This week's question: Have you noticed any change locally in the number of Realtors?

Real estate recap: Work starts on Airline shopping center; River Place set to begin construction; Sealy makes big deal
Barringer Crossing is coming: Construction has started on a 24,000-square-foot shopping center in the Barringer Foreman Technology Park on Airline Highway. MIE Properties-LA, which is developing Barringer Crossing, says it will support the needs of the technology park. MIE says it's targeting an array of retailers for the center, including restaurants, business services and medical offices. Downtown condo construction should start in early summer: Richard Preis, who is developing the River Place condominium tower downtown, says problems with rising post-hurricane construction costs have been resolved and he should start firming up reservations for units in the next month or two. "We should start construction in the early summer, with about 18 months to complete the project," Preis says. Sealy sells properties; $35 million deal big: Sealy & Company, a New Orleans-based real estate investment company, has sold assets in five cities, including Baton Rouge, for $138 million in cash. Sealy sold the properties, which include seven buildings with 460,000 square feet of space in the Industriplex area, to the Lightstone Group, one of the largest private owners of real estate in the United States. Mike Falgoust of Sealy & Falgoust Real Estate, who was involved in the sale, says the Baton Rouge properties sold for just under $35 million. "This is one of the biggest deals in Baton Rouge," says Falgoust.

from: http://www.smallcommercialmortgageonline.com/blog/2007/01/26/louisiana-real-estate-bubbleville-vs-bargaintown/?action=print